This release applies to all credit unions, both state and federal. It describes a Truth in Lending regulation that requires lenders to consider a borrower’s ability to repay when originating closed-end consumer credit transactions secured by a dwelling. It also describes certain presumptions of compliance for loans that are considered “qualified mortgages.” This release is based on the Consumer Financial Protection Bureau’s (the CFPB’s) “Ability-to-Repay and Qualified Mortgage Rules Small Entity Compliance Guide,” but it also addresses Wisconsin law and cross-references other League resources.
This release applies to all credit unions, both state and federal. It describes nine federal Mortgage Servicing Rules – regulations issued by the Consumer Financial Protection Bureau (CFPB) that address the duties of mortgage loan “servicers.” This release is based on the CFPB’s “2013 Real Estate Settlement Procedures Act (Regulation X) and Truth in Lending (Regulation Z Mortgage Servicing Final Rules, Small Entity Compliance Guide,” but it also addresses Wisconsin law and cross-references other League resources. It is current through September 2013 amendments.
These final rules implement provisions of the Dodd-Frank Act regarding mortgage loan servicing.
The Reg. X final rule implements servicers’ obligations to correct errors asserted by mortgage borrowers; to provide certain information requested by such borrowers; and to provide protections to such borrowers in connection with force-placed, servicers’ obligations to establish reasonable policies and procedures to achieve certain objectives; to provide information about mortgage loss mitigation.
The Reg. Z final rule implements rate adjustment notices for adjustable-rate mortgages, periodic statements for residential mortgage loans, prompt crediting of mortgage payments, and responses to requests for payoff amounts. amounts.
The CFPB amended Reg. Z, which implements the Truth in Lending Act (TILA). Reg. Z currently prohibits a creditor from making a higher-priced mortgage loan without regard to the consumer’s ability to repay the loan. The final rule implements sections 1411 & 1412 of the Dodd-Frank Wall Street Reform & Consumer Protection Act (Dodd-Frank Act), which generally require creditors to make a reasonable, good faith determination of a consumer’s ability to repay any consumer credit transaction secured by a dwelling (excluding an open-end credit plan, timeshare plan, reverse mortgage, or temporary loan) & establishes certain protections from liability under this requirement for “qualified mortgages.” The final rule also implements section 1414 of the Dodd-Frank Act, which limits prepayment penalties. Finally, the final rule requires creditors to retain evidence of compliance with the rule for three years after a covered loan is consummated.
This rule implements the Truth in Lending Act (TILA), and the official interpretation to the regulation. The revisions to Regulation Z implement a new provision requiring appraisals for “higher-risk mortgages” that was added to TILA by the Dodd-Frank Act. For mortgages with an annual percentage rate that exceeds the average prime offer rate by a specified percentage, the final rule requires creditors to obtain an appraisal or appraisals meeting certain specified standards, provide applicants with a notification regarding the use of the appraisals, and give applicants a copy of the written appraisals used.
The final rule revises Regulation B to implement an ECOA amendment concerning appraisals and other valuations that was enacted as part of the Dodd-Frank Act. In general, the revisions to Regulation B require creditors to provide to applicants free copies of all appraisals and other written valuations developed in connection with an application for a loan to be secured by a first lien on a dwelling, and require creditors to notify applicants in writing that copies of appraisals will be provided to them promptly.
The CFPB is issuing a final rule that amends Regulation Z (Truth in Lending) to implement certain amendments to the Truth in Lending Act made by the Dodd-Frank Act. Regulation Z currently requires creditors to establish escrow accounts for higher-priced mortgage loans secured by a first lien on a principal dwelling. The rule implements statutory changes made by the Dodd-Frank Act that lengthen the time for which a mandatory escrow account established for a higher-priced mortgage loan must be maintained. The rule also exempts certain transactions from the statute’s escrow requirement. The primary exemption applies to mortgage transactions extended by creditors that operate predominantly in rural or underserved areas, originate a limited number of first-lien covered transactions, have assets below a certain threshold, and do not maintain escrow accounts on mortgage obligations they currently service.
The CFPB issued this final rule to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act’s amendments to the Truth in Lending Act and the Real Estate Settlement Procedures Act. The final rule amends Regulation Z (Truth in Lending) by expanding the types of mortgage loans that are subject to the protections of the Home Ownership and Equity Protections Act of 1994 (HOEPA), revising and expanding the tests for coverage under HOEPA, and imposing additional restrictions on mortgages that are covered by HOEPA, including a pre-loan counseling requirement. The final rule also amends Regulation Z and Regulation X (Real Estate Settlement Procedures Act) by imposing certain other requirements related to homeownership counseling, including a requirement that consumers receive information about homeownership counseling providers.
The final rule implements requirements & restrictions imposed by the Dodd-Frank Act concerning loan originator compensation; qualifications of, & registration or licensing of loan originators; compliance procedures for depository institutions; mandatory arbitration; & the financing of single-premium credit insurance.
The amendments to § 1026.36(h) and (i) are effective on June 1, 2013. All other provisions of the rule are effective on January 10, 2014.
The Consumer Financial Protection Bureau (CFPB) has announced that it is extending the effective date of several mortgage disclosures required by the Dodd-Frank Act.
Dodd-Frank required the CFPB to combine certain disclosures from the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). For decades, TILA and RESPA have required credit unions to give borrowers different (but overlapping) disclosures for most mortgages loans. (For example, RESPA requires the Good Faith Estimate, but the "early" TILA disclosures provide much of the same information). In July, the CFPB proposed new Loan Estimate and Closing Disclosure forms that combine the required TILA and RESPA forms. Final rules implementing these new forms are expected in 2013.
The Consumer Financial Protection Bureau (CFPB) is releasing final regulations today, designed to give consumers better tools and information when dealing with mortgage servicers. The rules will take effect on January 10, 2014.
As explained in ii Release No. B068, when a credit union makes a first-lien "higher-priced mortgage loan" (HPML) it must escrow for taxes, homeowners insurance and other insurance the credit union requires. This escrow rule has several exceptions, and a new exception takes effect June 1: Small credit unions in certain "rural" or "underserved" areas will not be required to establish escrows for first-lien HPMLs.
Everyone is eager for even more mortgage lending rules from the Consumer Financial Protection Bureau (CFPB), right? The federal regulators have been working overtime lately to issue rules required by the Dodd-Frank Act. Two new sets of rules have now been issued … in addition to the other six final rules that have come out in the last two weeks.
The Federal Housing Finance Agency (FHFA) has announced that it is directing Fannie Mae and Freddie Mac to buy only mortgage loans that meet the requirements for a qualified mortgage, including those that meet the special or temporary qualified mortgage definition, and loans that are exempt from the "ability to repay" requirements.
Several of The League's ii Releases are being updated to address changes to Truth in Lending's Regulation Z. The Consumer Financial Protection Bureau (CFPB) recently amended Reg. Z §1026.36, as required by the federal Dodd-Frank Act. Effective Jan. 10, 2014, these changes will apply to "loan originators" who handle closed-end loans secured by a consumer's dwelling.
The League is publishing a new ii Release, No. B074, which describes a Truth in Lending regulation that requires lenders to consider a borrower’s ability to repay when originating closed-end consumer credit transactions secured by a dwelling. It also describes certain presumptions of compliance for loans that are considered "qualified mortgages."
The federal agencies that regulate financial institutions are releasing new joint final rules that will require interior appraisals and appraisal notices for certain "higher-priced mortgage loans" (HPMLs), effective Jan. 18, 2014. An additional appraisal will be required, at no cost to the borrower, if the house is being "flipped."
Now that the holidays are over, the Legal Affairs staff thought it would be a good idea to remind Wisconsin credit unions of all the compliance changes that took effect as of Jan. 1, and to look ahead to whatâ€™s on the horizon for compliance in 2013. Be sure your staff is on top of these changes, so your credit union can stay in compliance.
The Consumer Financial Protection Bureau (CFPB) has issued quite a few new mortgage lending rules recently, as required by the Dodd-Frank Act. Most of the regulations aren’t effective until next year, but a few go into effect June 1, 2013, including these two:
union cannot finance, directly or indirectly, any premiums or fees for credit insurance in connection with a consumer loan secured by a dwelling.
Also, residential mortgage documents cannot require arbitration for disputes.
Learn more about the rule in a plain language and FAQ format which makes the content more accessible for a broad array of industry constituents, especially smaller businesses with limited legal and compliance staff.